Soaring rents. Skyrocketing home prices. The double-digit rates of increase in the costs of Boise-area housing create increasingly urgent problems for low-income, working-class and even moderate-income Idahoans who need places to live. This is Affording Boise, a series of Idaho Statesman special reports on housing.
It’s not likely to be much consolation for Boise-area renters to learn that a national real estate analytics firm has found that it’s more affordable to rent than to buy in Ada County.
Despite rental prices rising faster than wages, ATTOM Data Solutions says Boise is among the 44% of U.S. housing markets where it makes more sense to rent than buy. That means rents consume a smaller portion of average local wages than monthly house payments, ATTOM said.
In 58% of the markets, buying a home makes better economic sense.
The median rent for a three-bedroom apartment in Boise jumped 18.2% in the last 12 months, according to Apartment List, a listing service. A three-bedroom apartment rents for $1,500 per month, while a two-bedroom apartment goes for $1,183, Apartment List’s monthly report for March found.
ATTOM’s analysis reports slightly higher rents, with the median three-bedroom apartment at $1,665.
Rents in Idaho as a whole rose at a faster rate in the past year than in Boise, 19.6% Apartment List says. Nationally, they increased 17.6%.
Boise developer Clay Carley said rents have risen dramatically as the inventory of available houses for sale has been low for the past several years. And Boise rental prices were historically low, he said.
As new apartment complexes have been built, many in downtown Boise, land prices, construction costs and modern amenities have led to premium prices, he said by phone. Carley’s most recent downtown apartment buildings, the Thomas Logan and The Lucy, have begun leasing to tenants.
“We’re catching up with the rest of the world with new construction, and it’s just very expensive,” Carley said.
Ada County home prices rose 21.6% between February 2021 and February 2022, according to the Intermountain Multiple Listing Service. The median price last month was $549,900.
Rising wages and low mortgage rates contributed to affordability in cities where it’s better to buy than rent. Average wages rose about 8% nationally in 2021, while mortgage rates remained near 3%, ATTOM said in its report.
While wages increased 5.8% in Ada County, according to ATTOM, that gain was wiped out by the increase in home prices.
ATTOM’s analysis found that it was more affordable to buy a median-priced home than rent a three-bedroom apartment in 666 of the 1,154 counties studied for its report.
Generally, the markets where renting is more affordable are large urban centers: 31 of the 42 counties with more than 1 million residents. They include Los Angeles, San Francisco, Orange County and Riverside, California, Chicago, Miami and New York City.
Cities with more than 1 million residents where buying a home is more affordable include Philadelphia, Detroit, Tampa, Houston and San Antonio.
The West is the least affordable region for renters, and along with the Northeast is the least affordable market for home buyers, according to ATTOM.
The most affordable regions for both renters and home buyers are the South and Midwest.
This story was originally published April 6, 2022 8:47 AM.